ICICI Bank bad loans jump in Q3

ICICI Bank Ltd, India’s biggest private sector lender by assets, saw its bad loans surge in the December quarter on a central bank order to reclassify some troubled loan accounts, and predicted sour assets will rise further this quarter.

The lender reported on Thursday that its standalone net profit in this fiscal’s third quarter rose to 4.5 per cent from a year earlier to Rs 30.18 billion ($443 million), in line with analysts’ estimates of Rs 30.17 billion on average. The profit was helped by tax adjustments.

Indian banks have seen a surge in their bad and restructured loans in the past three years as an economic slowdown squeezed companies’ profitability and their ability to service debt.

ICICI Bank’s bad loans as a percentage of total loans widened to 4.72 per cent in the December quarter, from 3.77 per cent in the previous three months. Provisions tripled to Rs 28.44 billion.